Will Medicaid expansion cost states more or less?

'Net budget savings' possible for some, says Kaiser study

States deciding to expand their Medicaid rolls in concert with the policy promulgated and the structural provisions already laid out by the Affordability Care Act, will fiscally benefit, according to a Kaiser Family Foundation study released this week.

Critical aspects of the study, culled from a HealthLeaders report extrapolate myriad findings, including that “some states could net budget savings under the expanded Medicaid rolls as millions of poor and uninsured gain coverage.” Further, the KFF report — which is available here — indicates a state’s current Medicaid spending could decrease if it chose to participate. How much less that would be would depend on several factors, such as the number of uninsured residents a state has and the federal government's reimbursement rate.

“According to the analysis, which was written by the Urban Institute for KFF's Commission on Medicaid and the Uninsured, if all 50 states expand their programs, state Medicaid spending nationally would increase by $76 billion from 2013 to 2022, an increase of less than 3%. For the same period the federal Medicaid match would increase by $952 billion, or 26%. With the expansion, an additional 21.3 million people could gain Medicaid coverage by 2022 and with other coverage provisions of the PPACA that would cut the uninsured by 48%.”

"We are talking about healthcare and healthcare is expensive," said Alan Weil, executive director of the National Academy for State Health Policy in a Monday conference call with the media. "It's fairly easy to have a little sticker shock at the potential costs of various policy options ... but what this report does very effectively is place the spending burden that states would face if they choose to expand Medicaid in the context of overall spending."

According to a number of online sources, one linked here, Tennessee officials haven’t yet decided whether to expand the state's Medicaid rolls.